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Paul Krugman Comes Out Against Obamacare?

10:00 AM, Sep 29, 2011 • By MARK HEMINGWAY
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Well, sort of. Before I get to Krugman, a little relevant context.

Lots of people are talking about former OMB head Peter Orszag's latest article in The New Republic. Essentially, he argues in favor of solving America's problems by circumventing democracy, shifting more power to make policy away from elected politicians and giving it to nonpolitical technocrats.

One could pithily summarize this as a powerful technocrat moaning that technocrats don't have enough power, and as such, this article is proving to be a rare point of agreement among both the right and the left. Here's Paul Krugman's less-than-charitable take on Orszag's musings:

Yes, the political world is deeply dysfunctional — but what’s equally remarkable is just how terrible the judgment of the supposed experts has been. It’s not just the complete failure to foresee this crisis. Fancy international organizations have been persistently offering disastrous advice, counseling austerity and interest rate hikes just as the recovery, such as it is, stumbles. Politicians say dumb things about monetary policy — but so does the ECB.

The point is that what we need are the right ideas, not the right sort of people. Madmen in authority come in all forms, and the dignified men in suits are often no better than the rabble-rousers.

I can't believe I'm saying this earnestly, but it's hard not to agree with Krugman here. (Well, I might differ regarding the specifics of what should be done to save European economies, but his overall point about the wisdom of supposed experts is smack on target.)

I do wonder, however, if this forthright acknowledgment about the problems of technocrats is Krugman finally coming to grips with the problems of Obamacare. After all, our $30 trillion Medicare shortfall over the next 75 years is both our biggest financial and health care problem. And how does Obamacare deal with it? Yup, politically unaccountable technocrats.

More specifically, the Patient Protection and Affordable Care Act creates a panel called the Independent Payment Advisory Board (IPAB) to rein in Medicare spending. It's a panel comprised of 15 presidential appointees who are tasked with reducing Medicare spending. The panel is given certain spending targets that kick in 2014. At first those targets are on a sliding scale, but by 2018 the spending targets are set at the rate of GDP growth with an additional percentage point tacked on. The president has since called for ratcheting the spending target down even more, to GDP plus 0.5 percent.

Any recommendations IPAB makes about Medicare spending automatically become law. Congress can only override IPAB with a three-fifths majority vote, which is a very high legislative hurdle, or they can pass their own Medicare plan that meets the same spending target. There’s no administrative process allowing doctors or citizens to challenge the board’s decisions.

Since Medicare comprises about 13 percent of the federal budget, that’s a tremendous amount of responsibility to be placing in the hands of unelected bureaucrats. (And that percentage is rising rapidly -- as Paul Ryan recently noted, Medicare costs are rising at 6.3 percent a year.) As I reported in an article for THE WEEKLY STANDARD last May, IPAB may not even be constitutional -- the Goldwater Institute has filed a credible lawsuit alleging that transferring that much power from the legislative to the executive branch violates the constitution's delegation of powers.

Yet, Obamacare's chief defenders explicitly argued that the fact the panel would be unaccountable to elected representatives was a feature and not a bug. Ezra Klein was particularly notable for advancing this argument. "As a commentary on Congress, is all this a bit sad, and even weird? Yes. But it may also be necessary," he wrote. (Also, see his lengthier defense of IPAB here.)

This was all predicated on the idea that Congress so feared voter wrath over Medicare cuts they would never take the necessary steps to get costs under control. Except we now know that's not true, because earlier this year, Republicans voted near unanimously in support of Rep. Paul Ryan's budget. Ryan's plan radically overhauls Medicare, bringing costs under control by allowing future seniors to purchase private Medicare coverage with government premium supports.

Naturally, Ryan's plan was immediately attacked by Paul Krugman, who declared that the "Ryan plan would end Medicare as we know it." Well, the alternative to Ryan's plan to let people purchase their own health coverage is IPAB, a.k.a. letting bureaucrats make painful cuts to health care spending on your behalf -- and it's already been passed into law. Which approach strikes you as more democratic? Before you answer that question, I'll just toss out a link to the obligatory Paul Krugman IPAB column where he calls those opposed to handing over 13 percent of the federal budget to unelected technocrats "profoundly irresponsible."

Funny how liberals such as Krugman are so skeptical about attempts to undermine democracy in the abstract, but are much more open to the idea when undermining democracy furthers their specific policy goals.

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